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EC World Reit&rsquo s manager responds to SGX queries on going concern issues
EC World Reit is in the process of completing the proposed divestment of its indirect interests in Bei Gang Logistics (above)
SINGAPORE &ndash EC World Reit&rsquo s manager said that the real estate investment trust (Reit) has adequate current assets to meet its short-term liabilities, in its response to queries from the Singapore Exchange (SGX).
It was commenting on whether the China-focused player with e-commerce, supply chain management and logistics properties would be able to meet its short-term liabilities of about $818.5 million. The bourse regulator noted that ECW Group&rsquo s liabilities stood at $1.1 billion but had cash of only $113.3 million, as shown in the group&rsquo s condensed interim financial statements.
EC World Asset Management replied on Friday that 64 per cent and 82 per cent of lenders involved in existing onshore and offshore bank loans respectively have obtained internal approvals and are agreeable to a new repayment plan.
The remaining lenders, stated EC World Reit&rsquo s manager, are &ldquo in the process&rdquo of obtaining internal approvals for the new repayment plan.
Also, it noted that the Reit is in the process of completing the proposed divestment of its indirect interests in Bei Gang Logistics and Chongxian Port Logistics at the agreed property values of 1.2 billion yuan (S$235.2 million) and 820 million yuan respectively, with the proceeds adequate to meet the mandatory loan repayment.
The Reit sponsor, it added, has been discussing with financial institutions and investors on securing financing for the purchasers of the proposed divested assets.
The manager also noted that the group will be in a net current asset position of $180.1 million immediately after the completion of the proposed divestment, settlement of existing loans under the new repayment plan and the refinancing of April outstanding loans.
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On the question whether the financial statements were correctly prepared on a going concern basis when the group&rsquo s and the Reit&rsquo s current liabilities exceeded current assets by $228.6 million and $131 million respectively and that the group has $586.3 million due for repayment by December 2023, the manager said the sponsor had placed 200 million yuan into escrow for the sum to be eventually used for partial settlement of mandatory loan repayment.
The sponsor, the manager added, last Friday further demonstrated its support for the Reit by paying an additional US$1.5 million (S$2 million) to the Reit. The sum is intended for the partial repayment of existing offshore bank loans.
EC World Reit&rsquo s manager assuages concern about its going concern
EC WORLD Reit : BWCU -2.94%&rsquo s manager said that the real estate investment trust (Reit) has adequate current assets to meet its short-term liabilities, in its response to queries from the Singapore Exchange (SGX).
It was commenting on whether the China-focused player with e-commerce, supply-chain management and logistics properties would be able to meet its short-term liabilities of about S$818.5 million. The bourse regulator noted that the group&rsquo s liabilities stood at S$1.1 billion but only had cash of S$113.3 million, as shown in the group&rsquo s condensed interim financial statements.
EC World Asset Management replied on Friday (Mar 10) that 64 per cent and 82 per cent of lenders involved in existing onshore and offshore bank loans respectively have obtained internal approvals and are agreeable to a new repayment plan. The remaining lenders, stated EC World Reit&rsquo s manager, are &ldquo in the process&rdquo of obtaining internal approvals for the new repayment plan.
Also, it noted that the Reit is in the process of completing proposed divestment of its indirect interests in Bei Gang Logistics and Chongxian Port Logistics at the agreed property values of 1.2 billion yuan (S$235.7 million) and 820 million yuan respectively, with the proceeds adequate to meet the mandatory loan repayment.
The sponsor, it added, has been discussing with financial institutions and investors on securing financing for the purchasers of the proposed divested assets.
The manager also noted that the group will be in a net current asset position of S$180.1 million immediately after the completion of the proposed divestment, settlement of existing loans under the new repayment plan and the refinancing of April outstanding loans.
On the question whether the financial statements were correctly prepared on a going concern basis when the group and the Reit&rsquo s current liabilities exceeded current assets by S$228.6 million and S$131 million respectively and that the group has S$586.3 million due for repayment by December 2023, the manager said the sponsor had placed 200 million yuan into escrow for the sum to be eventually used for partial settlement of mandatory loan repayment.
The sponsor, the manager added, last Friday further demonstrated its support for the Reit by paying an additional US$1.5 million to the Reit. The sum is intended for the partial repayment of existing offshore bank loans.
EC World Reit releases more funds from escrow for loan repayments
MORE funds deposited by its sponsor for loan repayment have been released from escrow to help pay for some of the Reit&rsquo s outstanding mandatory repayments, EC World Real Estate Investment Trust&rsquo s : BWCU +1.47% (Reit) manager said on Tuesday (Mar 7).
Around S$5.7 million and US$1.9 million were used to partially repay existing offshore bank loans on Mar 2, while 29.3 million yuan (S$5.7 million) was used to repay existing onshore bank loans partially on Mar 7, the manager said.
The outstanding amount of relevant deposits stands at 29.9 million yuan, which the onshore facility agent continues to hold in escrow. The deposits held in escrow with the offshore facility agent have been fully utilised.
As at Mar 7, the Reit has some S$57.7 million in offshore bank loans and S$81.2 million in onshore bank loans to repay.
Using a portion of the deposits would enable the Reit to save on interest payments which would otherwise be incurred on the outstanding loan amounts, said the manager.
It also noted there is no certainty or assurance that the lenders will consent to the extension of the mandatory repayment deadline beyond Feb 28.
Until this consent is obtained, EC World Reit is in breach of its mandatory repayment obligations, which triggers an event of default under the existing offshore and onshore bank loans.
To date, around 50 per cent of existing onshore bank loan lenders and 75 per cent of lenders of existing offshore bank loans have agreed to the Reit&rsquo s new repayment plan. The manager said it will provide an update if all lenders have given their approval, or if any lender has rejected the new repayment plan.
Previously, the manager released about 198.9 million yuan from escrow to partially repay the outstanding mandatory repayment of its offshore and onshore bank loans.
Just thinking out loud, if the sponsors want to let EC World go bankrupt why then bother with making any repayments at all....
https://www.businesstimes.com.sg/companies-markets/ec-world-reit-releases-more-funds-escrow-loan-repayments
MORE funds deposited by its sponsor for loan repayment have been released from escrow to help pay for some of the Reit&rsquo s outstanding mandatory repayments, EC World Real Estate Investment Trust&rsquo s : BWCU 0% (Reit) manager said on Tuesday (Mar 7).
Around S$5.7 million and US$1.9 million were used to partially repay existing offshore bank loans on Mar 2, while 29.3 million yuan (S$5.7 million) was used to repay existing onshore bank loans partially on Mar 7, the manager said.
The outstanding amount of relevant deposits stands at 29.9 million yuan, which the onshore facility agent continues to hold in escrow. The deposits held in escrow with the offshore facility agent have been fully utilised.
......
To date, around 50 per cent of existing onshore bank loan lenders and 75 per cent of lenders of existing offshore bank loans have agreed to the Reit&rsquo s new repayment plan. The manager said it will provide an update if all lenders have given their approval, or if any lender has rejected the new repayment plan.
Previously, the manager released about 198.9 million yuan from escrow to partially repay the outstanding mandatory repayment of its offshore and onshore bank loans.
MORE funds deposited by its sponsor for loan repayment have been released from escrow to help pay for some of the Reit&rsquo s outstanding mandatory repayments, EC World Real Estate Investment Trust&rsquo s : BWCU 0% (Reit) manager said on Tuesday (Mar 7).
Around S$5.7 million and US$1.9 million were used to partially repay existing offshore bank loans on Mar 2, while 29.3 million yuan (S$5.7 million) was used to repay existing onshore bank loans partially on Mar 7, the manager said.
The outstanding amount of relevant deposits stands at 29.9 million yuan, which the onshore facility agent continues to hold in escrow. The deposits held in escrow with the offshore facility agent have been fully utilised.
......
To date, around 50 per cent of existing onshore bank loan lenders and 75 per cent of lenders of existing offshore bank loans have agreed to the Reit&rsquo s new repayment plan. The manager said it will provide an update if all lenders have given their approval, or if any lender has rejected the new repayment plan.
Previously, the manager released about 198.9 million yuan from escrow to partially repay the outstanding mandatory repayment of its offshore and onshore bank loans.
This one is gone case or got a chance to recover from ashes?????
EC World Reit Q4 DPU down 59.1% to S$0.00628
EC WORLD Real Estate Investment Trust : BWCU 0%&rsquo s distribution per unit (DPU) declined 59.1 per cent to 0.628 Singapore cents for the fourth quarter ended Dec 31, 2022, from 1.537 cents for the corresponding period in 2021.
Gross revenue of the China-focused e-commerce logistics landlord was down 11 per cent to S$28.4 million for the quarter, from S$31.9 million in the year-ago period.
After straight-lining of step-up rental, security deposit accretion and other relevant distribution adjustments, EC World&rsquo s fourth-quarter gross revenue in RMB terms was 2 per cent lower than in the year before.
This was in large part due to the loss of rental income from Fu Zhuo Industrial &ndash as a result of the compulsory expropriation &ndash as well as lower late-fee income offsets by rental escalations, the Reit manager said in a bourse filing on Thursday (Feb 23).
Net property income (NPI) slipped 9.9 per cent to S$26 million, from S$28.8 million previously.
Distributable income declined 59.1 per cent year on year to S$5.1 million, from S$12.4 million. This was mainly due to an increase in finance costs, higher withholding taxes, and refinancing-related costs, among other things, said the manager in a statement.
This distribution will be paid out on Mar 29, after the record date on Mar 15.
Meanwhile, for the full year ended Dec 31, 2022, EC World&rsquo s distributable income fell 23.8 per cent to S$38.6 million. Gross revenue was 3.1 per cent lower at S$121.6 million, while NPI eased by 1.8 per cent to S$111 million for the full year.
&ldquo Our quality assets continued to show resilience, even under challenging operating conditions in FY2022 as restrictions and Covid outbreaks continued to constrain e-commerce logistics growth,&rdquo said executive director and chief executive Goh Toh Sim.
&ldquo We will continue to focus on reinforcing our long-term capabilities as e-commerce and port logistic assets owner, to prepare for the upturn as activities and mobility recover in China,&rdquo he added.
looks like the rising interesting rate situation going to get worst. DBS estimate that US rate might peak at 4.75%, another 0.75% increase from now.
REITs like EC WORLD REIT with high leverage of 39.3%+ will be hit the hardest due to the increase in interest rate cost
If they choose to do a placement to lower leverage level, this is often done at a discount to market price
REITs like EC WORLD REIT with high leverage of 39.3%+ will be hit the hardest due to the increase in interest rate cost
If they choose to do a placement to lower leverage level, this is often done at a discount to market price
EC World Reit releases 198.9 million yuan of margin deposit from escrow for loan repayment
THE manager of EC World Reit on Sunday (Feb 12) said it has released a portion of its margin deposit &ndash or an aggregate of roughly 198.9 million yuan (S$38.9 million) &ndash from escrow, and utilised the amount to partially repay the outstanding mandatory repayment of its offshore and onshore bank loans.
About 140.2 million yuan was put towards the partial repayment of the real estate investment trust&rsquo s (Reit&rsquo s) existing offshore bank loans, while 58.6 million yuan was used for the partial repayment of existing onshore bank loans, the company said in a regulatory filing.
This arrangement would allow EC World Reit to save on interest payments which would otherwise be incurred on the outstanding loan amounts, the trust said.
After the release of funds, the Reit&rsquo s margin deposit as at Feb 11 stands at about 1.1 million yuan, which continues to be held in escrow.
The Reit said its sponsor and lenders have agreed for the portion of its margin deposit to be released for the partial repayment of loans.
The trust said it will make further announcements on the Singapore Exchange in the event of material developments that warrant disclosure.
EC World Reit extends long stop date for divestment of two Chinese logistics assets
THE manager of EC World Real Estate Investment Trust (EC World Reit) has announced an extension to the long stop date for the proposed divestment of two Chinese logistics assets to Feb 28 from Jan 31, 2023.
The extension is due to the purchasers being unable to complete the divestment by Jan 31 &ldquo as they are in the process of obtaining the relevant financing approvals from their lending banks in relation to their financing for the proposed divestment&rdquo , the manager said in a bourse filing on Monday (Jan 30).
The other rationale for the extension is that the deadline for the repayment of the remaining mandatory amount is now Feb 28 based on the repayment plan, it said.
&ldquo The sponsor demonstrated its support for EC World Reit by working closely together with the manager to engage the lenders and arrive at a repayment plan which the lenders are agreeable to, and by procuring the fulfilment of certain conditions under the repayment plan,&rdquo the manager said.
This includes placing the margin deposit in the escrow account of the onshore facility agent under the existing onshore bank loans, and by paying S$4.4 million to the lenders as partial repayment of the existing offshore bank loans.
In October last year, EC World Reit had announced that it would be divesting its indirect interests in Bei Gang Logistics and Chongxian Port Logistics for a total of 2.03 billion yuan (S$392.7 million). Part of the divestment proceeds would go towards repaying the Reit&rsquo s outstanding onshore and offshore loans.
It then announced in late November that the Covid-19 situation in China had caused delays in the lenders&rsquo internal approval processes for the transaction financing. The purchasers were therefore unable to complete the transaction financing processes before the long-stop date of Nov 18.
EC World Reit able to operate as going concern: Reit manager
EC World Real Estate Investment Trust (Reit) : BWCU 0% is able to operate as a going concern, and trading of its units should not be suspended, its board said in response to queries from Singapore Exchange (SGX) : S68 -0.89%.
In its response on Tuesday (Jan 3), the manager for the Reit, EC World Asset Management, reasoned that it is in the process of divesting some properties, and expects that existing bank loans will be repaid or refinanced before any default is called by the lenders. The operations of the ECW group continues to be &ldquo stable and profitable&rdquo , it added.
It noted that the proceeds of the proposed divestment will be sufficient to make the mandatory repayment, while about 83 per cent of the lenders have internally approved the repayment plan and the remaining lenders are in the process of obtaining approval.
The statement said EC World Asset Management has been advised that the remaining lenders have no internal directive to call for default at this juncture.
After its bank loans are cleared or refinanced by Apr 30, 2023, it is estimated that the EC World group will be in a net current assets position of S$141.8 million.
The board has also assessed that trading of units in EC World Reit should not be suspended as the China pure play with logistics assets is able to continue operating as a going concern as well as assess its financial position.
EC World REIT' s lenders to extend mandatory repayment deadline to Feb
The manager of EC World REIT says that its lenders have extended the mandatory repayment deadline to Feb 28 from the original deadline of Dec 31, 2022.
The extension comes with two conditions. First, Forchn Holdings Group Co., Ltd., the sponsor of EC World REIT, will have to place a margin deposit of RMB200 million ($38.9 million) in the onshore facility agent&rsquo s escrow account. The margin deposit is said to have been paid on Dec 30, 2022.
Next, the sponsor will have to pay $4.4 million to the lenders as partial repayment of the existing offshore bank loans by Jan 6. The money will be funded by the distributions made to Forchn Global, in its capacity as unitholder of EC World REIT, by the REIT for the financial period from July 1, 2022, to Sept 30, 2022.
The payments made by the REIT&rsquo s sponsor, which amounts to around RMB222.8 million, will constitute prepayment in part by the purchasers to the vendor. The balance of the equity consideration (amounting to approximately RMB1.15 billion) will be payable to the vendor upon completion.
The manager adds that the majority of the lenders under the existing offshore bank loans and the existing onshore bank loans have obtained their respective internal approvals for the repayment plans. They have also indicated that they do not intend to call for an event of default under the existing bank loans.
The remaining lenders are in the process of obtaining their internal approvals for the repayment plan, continues the manager.
While the mandatory repayment has not been made by the deadline of Dec 31, 2022, the manager says that the remaining lenders are still obtaining internal approvals for the repayment plan and that there has been no indication that they would call for an event of default.
EC World Reit loans expected to be repaid or refinanced before due dates, manager assures
THE manager of EC World Real Estate Investment Trust (Reit) expects that its existing bank loans will be repaid or refinanced before they become due for repayment, it said in a bourse filing on Thursday (Dec 29).
The assurance was a response to queries from the Singapore Exchange Securities Trading (SGX-ST) after the manager on Dec 26 said the Reit&rsquo s mandatory payment due Dec 31 represents some 25 per cent of its outstanding onshore and offshore loans.
The debt remained outstanding amid continued delays to divestment plans of two Chinese logistics assets. The sum amounted to some 2.03 billion yuan (S$392.7 million). Part of the divestment proceeds were earmarked for the Reit to repay its loans.
The manager on Thursday said the lenders are in the process of obtaining internal approval for the repayment plan.
Under the plan, the sponsor will provide funding to let the Reit settle a portion of the mandatory repayment by Dec 31, with the remaining deferred to a date falling within the first quarter of 2023.
The manager also said the Reit intends to fund the mandatory repayment amount using equity consideration to be paid by purchasers of its assets on or before the sale completes.
At this point, the purchasers have noted that they do not expect to be able to complete the proposed divestment by Dec 31. Instead, completion is expected by Jan 31, 2023.
As for whether the company&rsquo s current assets are adequate to meet its short-term liabilities of S$810 million, the manager said the current assets of the group amount to S$593.9 million as at Sep 30. Thus, the group is in a net current liabilities position of S$216.1 million, it said.
Based on the expectation that its current existing bank loans &ndash some S$561.3 million &ndash will be repaid or refinanced by Apr 30, 2023, it is estimated that the group will be in a net current assets position of S$141.8 million after the proposed divestment, payment of the mandatory repayment amount, and refinancing.
This calculation took into account the group&rsquo s third-quarter financial information announced on Nov 9, equity consideration and some transaction costs which were disclosed, the manager said.
&ldquo Based on all of (the) above, the manager has assessed that the ECW Group&rsquo s current assets are adequate to meet its short-term liabilities,&rdquo it concluded. The manager also said EC World will be able to operate as a going concern.
EC World REIT' s sponsor to fund REIT to pay its lenders a portion of the mandatory repayment by Dec 31
The manager of EC World REIT says it is in &ldquo discussions&rdquo with the lenders of its existing offshore bank loans and existing onshore bank loans to work out a &ldquo debt repayment plan&rdquo pertaining to the mandatory repayment.
The mandatory repayment is due on Dec 31.
Under the repayment plan, the REIT&rsquo s sponsor will provide funding for the REIT to pay its lenders a portion of the mandatory repayment by Dec 31, says the REIT manager in its Dec 26 statement.
The payment for the remaining sum will be deferred to a date falling within the first quarter of 2023.
&ldquo The lenders are in the process of obtaining the relevant internal approval for the repayment plan,&rdquo reads the statement. &ldquo The manager expects there to be an outcome by Dec 31 and will update the unitholders with the details relating to the repayment plan in due course.&rdquo
Should the manager and lenders fail to agree on a debt repayment plan by Dec 31, EC World REIT would be in breach of its mandatory payment obligations. It would then trigger an event of default under the existing offshore bank loans and existing onshore bank loans.
See also: Keppel REIT obtains $100 mil green loan facility
On June 28, 2019, the manager of EC World REIT announced that the REIT&rsquo s wholly-owned subsidiary, ECW Treasure and Zhejiang Fuzhou E-Commerce Co., Ltd. entered into an offshore facility agreement with various banks. The agreement was coordinated by DBS Bank and United Overseas Bank (UOB) as lenders for an aggregate principal amount of up to $424.5 million.
The offshore facility consists of a multicurrency term loan facility of up to $355.0 million, a Singapore dollar (SGD) term loan facility of up to $22.5 million, as well as a multicurrency term loan facility of up to $47.0 million.
At the same time, EC World REIT&rsquo s wholly-owned subsidiaries, Hangzhou Chongxian Port Investment Co., Ltd., Hangzhou Bei Gang Logistics Co., Ltd., Zhejiang Hengde Sangpu Logistics Co., Ltd. and Zhejiang Fuzhou E-Commerce Co., Ltd. entered into an onshore facility agreement coordinated by DBS Bank (China) Limited, Hangzhou branch and UOB (China) Limited, Hangzhou branch, as lenders for an aggregate principal amount of up to RMB1.095 billion consisting of two term loan facilities of RMB1.018 billion and RMB77.0 million respectively.
The facilities were for a tenure of approximately three years, save for the RMB 77.0 million portion of the onshore facility which has a tenure of 10 years.
DBS Group Research analysts Dale Lai and Derek Tan issued a downgrade on EC World REIT on Nov 21 after the REIT announced that it may face a potential delay on its divestments.
&ldquo It was previously believed that EC World REIT was on track to complete the divestments of Beigang Logistics Stage 1 and Chongxian Port Logistics by the end of this year. The divestments were necessary for EC World REIT to raise funds to repay at least 25% of its outstanding debt ($707.6 million), and the preconditions set by its lenders before it would refinance EC World REIT&rsquo s loans due to expire on April 30, 2023,&rdquo they wrote.
On Nov 23, the REIT manager said that the REIT " remains as a going concern" after it was confirmed that the mandatory repayment amount had to be repaid by Dec 31.
On Dec 9, the REIT manager, through its responses to investors&rsquo questions ahead of its Dec 16 extraordinary general meeting (EGM), confirmed that an event of default will trigger cross-defaults across the REIT&rsquo s other existing facilities.
On Dec 13, RHB Group Research announced the suspension of its coverage due to the ongoing uncertainties surrounding the completion of its divestment, loan refinancing, as well as ascertaining the REIT&rsquo s sponsor&rsquo s financial health.
https://www.thesingaporeaninvestor.sg/2022/12/16/my-summary-of-ec-world-reits-egm-on-16-december-2022/
Any update on egm? Not able to attend due to work.
RHB suspends coverage on EC World REIT due to uncertainties
RHB Group Research has suspended its coverage on EC World REIT on Dec 12. This comes on the back of the ongoing uncertainties surrounding loan refinancing, divestment completion and difficulty in ascertaining its sponsor' s financial health, says analyst Vijay Natarajan.
The brokerage&rsquo s last published recommendation on the counter was &ldquo neutral&rdquo with a target price of 55 cents.
On Nov 20, EC World REIT announced that it may face a potential delay in its divestments, causing DBS Group Research to downgrade its recommendation to &ldquo fully valued&rdquo .
The REIT manager, on Nov 22, said that its board assessed that the REIT &ldquo remains as a going concern&rdquo after the lenders of its existing offshore bank loans and existing onshore bank loans had asked the REIT to repay the mandatory repayment amount by Dec 31.
On Dec 9, the REIT released a statement responding to investors&rsquo questions ahead of its extraordinary general meeting (EGM), which will take place on Dec 16.
Ex Div las t week . Up $0.03 :)
SmallSmall ( Date: 05-Dec-2022 16:47) Posted:
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EC World REIT issues responses to investor questions ahead of Dec 16 EGM
EC World REIT has released a slew of responses to investor questions ahead of its Dec 16 EGM, which was called to ask shareholders to approve the divestment of two of the REIT&rsquo s properties in China.
The REIT&rsquo s manager will divest its indirect interests in Stage 1 Properties of Bei Gang Logistics and Chongxian Port Logistics for a consideration of RMB1.37 billion ($276.0 million).
This divestment comes after the REIT faced queries from the Singapore Exchange regarding the refinancing efforts of its offshore loans back in June.
In June, the REIT&rsquo s manager announced that it had only managed to extend the maturity date of its expiring offshore loan and onshore loan facilities to April 2023.
The extensions came with a condition by banks that the REIT&rsquo s sponsor Forchn Holdings provide an undertaking to repay 25% of its offshore loan by December or the REIT will be in default.
&ldquo If at least 25% of the aggregate principal amount of the outstanding offshore facilities is not repaid by 31 December 2022, EC World REIT faces an event of default which will trigger mandatory prepayment of the offshore facilities,&rdquo EC World REIT&rsquo s manager says.
The manager confirmed that the event of default will trigger cross-defaults across EC World REIT&rsquo s other existing facilities such as the onshore facilities and revolving loan facilities.
In a Dec 9 filing, EC World REIT&rsquo s manager explains that the divestment of the two properties will enable debt financing and refinancing by generating sufficient net proceeds for it to meet the mandatory repayment obligations that are due by 31 December 2022.
According to RHB Group Research, unitholders are expected to receive a special one-off dividend payment of approximately 11 cents from the sale.
&ldquo The proposed divestment is also an opportunity to realise value as the agreed property value of each of the divestment properties is at a premium to their respective appraised valuations, book value of the target companies, and IPO acquisition costs,&rdquo EC World REIT&rsquo s manager says.
The agreed property value of the two properties is nearly 18% higher than their initial purchase prices at IPO and at a premium to valuation.
The REIT&rsquo s manager says this move will help preserve long-term value as it will be able to avoid further decline in asset value caused by shifting market trends and upcoming major overhaul costs.
It elaborates that should the two properties continue to form part of EC World REIT&rsquo s portfolio, the long-term value to unitholders would deteriorate.
The REIT&rsquo s manager thinks that it is unfeasible to overhaul and reposition Divestment Properties to capture evolving e-commerce trends, saying that Beigang Logistics is not asattractive to tenants due to market trends, and Chongxian Port Logistics is an ageing property with extensive repairs required in the next couple of years.
The divestment will also enable the REIT to return cash to its unitholders in the form of a special distribution.
Upon the completion of the divestment, the manager intends to distribute a special distribution of RMB450.9 million out of the net proceeds after the repayment of at least 25% of its existing loans.
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This is intended to be done within 40 business days from the completion of the proposed divestment.
However, the REIT&rsquo s manager says in its responses that unitholders should note that there is no certainty or assurance that the special distribution will be made.
It explains, &ldquo depending on, among other factors, the likelihood of refinancing the April 2023 outstanding loans based on terms that are acceptable to EC World REIT, post-completion, the Manager may decide not to make the special distribution at all or may determine a lower quantum of the special distribution than what is currently expected.&rdquo
Nonetheless, the REIT&rsquo s manager is of the view that without the proceeds from the proposed divestment, EC World REIT is at the risk of an imminent default of its obligations that are due on Dec 31, and seeks support from all unitholders to approve the proposed divestment.
Tomorrow ex-div $0.01364